When I finally realized that I had no choice but to file Bankruptcy last year – I was scared to death. I had no idea what that meant. I just knew that a friend of mine filed about 10 years ago and within four years she was buying a new home, a new car and had a ton of credit cards. But I also knew that the laws changed and it wasn’t as easy as it used to be. So, after the realization set in and I was prepared to move forward I went on the Internet to research what filing for bankruptcy really meant. Once you get past all the legal wording of the law it is fairly a simple process. What will happen when a business becomes bankrupt? All the essential details to recover the financial loss will be provided through the san diego bankruptcy lawyer at reasonable rates or commission of the country.
If you make under a certain amount a year you are eligible to file for Chapter 7. With this type of filing – if the court accepts your claim your debt is basically forgiven. If you make over a certain amount of money you have to file Chapter 13. With this type of filing you have to repay a portion of your debt and that is based on your income and your household expenses. Based on my research on the web I quickly realized that I needed an attorney to do this for me. I would not be able to “go” this alone. I called a local attorney, made the appointment and was shocked when I found out how much it would cost. Keep in mind that you are filing for bankruptcy so you have no extra money, right?
The attorney told me that her cost was $3500 and there are additional fees that you have to pay the court to file. I think it was somewhere around $350. Plus you have to take a class on managing your money which also cost money! But the good news was I could pay her half now and the other half would go in with the bankruptcy. The rest had to be paid up front. I remember saying to myself, “isn’t that nice.” Then I was given a ton of paper work to read over and complete and was informed to have it back to her on a certain date. She did go over all the details with me but my mind was too busy thinking about where I would get the money to pay her.
When I left her office I was more depressed than when I got to her office. I just kept talking to myself saying things like: “this is for the best – you have to do this”. So, I sat at the kitchen table reviewing this massive stack of paper and began the task of gathering all the necessary documents. You need every single thing you could possibly imagine. Every bill, every address, every everything. It took me awhile but I did find it all. I borrowed the money to pay the attorney, paid and took the class online, and paid the upfront fee for filing and then you wait for a court date. You will have to go to the Federal Court for your appearance. Once there you basically sit in a large room. There will be many people there, some with attorneys and some without. The attorney really doesn’t do anything but sit beside you. The Trustee will swear you in and ask you if everything you have submitted is accurate and truthful and you say “yes’. They may have another question or two and then its over. Then before you are can leave you have to sit though yet another “money management class’ and then finally you are free to go.
The trustee then sends all your creditors a notice of your filing; requiring each creditor to verify the amount you owe. If you are filing Chapter 13 and they do not respond by the deadline given – then they are removed from any repayment plan. Once this is completed your Trustee will determine how much you must repay each month and a payment plan is put in place. Chapter 7 filers don’t have to repay.
Having an attorney is really a good idea if you can afford it as they know the trustee’s and they can file most everything over the internet but if you can’t afford it you can do this on your own regardless which chapter you are filing. An alternative would be to find a paralegal in your area and ask for their assistance. The cost is somewhere in the neighborhood of $250.00 and they will be able to assist you with all the legal forms and explain where and how to file them.
Now that I have been through it all, filing for bankruptcy is not as scary as I thought. Expensive, yes! Scary, no!
Stopping those hateful telephone calls from my creditors was a blessing.
However, sticking to the repayment plan is not so easy either – especially when you find yourself having to help out your family who are struggling just as hard too.